Gold web site aims to boost prices
By Gary Silverman in New York - 10 Apr 2000 20:06GMT
J.P. Morgan, the investment bank, and two of the gold sector's leading companies are starting an internet site selling "all things gold" in an attempt to boost the flagging price.
The site, to be called GoldAvenue, is backed by South Africa's AngloGold, the world's largest gold miner, and Swiss-based PAMP, the world's largest private gold refiner.
The three planned to sign an agreement today to form a joint venture, which was expected to go online in the second half of this year. The three companies are putting up $20m in initial capital for GoldAvenue's first year.
The organisers said the web site would eventually be a one-stop shop for gold investors and merchants although its initial focus will be on selling gold to retail customers.
Bobby Godsell, AngloGold chief executive, said GoldAvenue was an attempt to find new gold buyers now that central banks have become sellers.
Market conditions deteriorated to the point last year that European central banks agreed in September to cap their gold sales during the next five years.
"We have been arguing that if the gold industry is going to take charge of its destiny, it's going to have to go out and find a customer base directly," Mr Godsell said.
To that end, GoldAvenue will sell everything from gold watches and chains to individual grams of the metal. For investors, the minimum balance will be only $50.
"We want to be all things gold," said Mehdi Barkhordar, GoldAvenue's chief executive and managing director of PAMP. "When you think of gold, you think of us."
The organisers are looking to target the US market first, before moving into emerging markets, where gold remains a favoured investment.
"The problem in western markets is gold investments are inaccessible," Godsell said. "Western markets, we think, have been underdeveloped."
The organisers hope the site would eventually feature business-to-business gold trading. However, Mr Barkhordar said the partners had no timetable for such trading and were concentrating on getting the retail operation started before the Christmas season.
William Winters, head of J.P. Morgan's markets arms, said the bank would provide trading capabilities and vault services to the joint venture.
GoldAvenue is the latest in a series of internet ventures that J.P. Morgan has announced in recent months, most of them looking to commercialise existing businesses.
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